The U.S. travel agency market is experiencing a remarkable resurgence, driven by strong demand, rising prices, and an evolving advisor landscape according to Phocuswright’s latest travel research report. In 2023, gross bookings surged 28% to reach $109.7 billion, continuing the post-pandemic rebound. While the pace of growth is expected to moderate, travel agency sales are projected to rise another 9% in both 2024 and 2025, with leisure agencies leading the way and corporate travel agencies regaining ground.

Leisure travel remains dominant, accounting for 65% of agency sales, with high-end experiences, cruises, and tours fueling growth. Cruise sales, in particular, saw a staggering 152% increase in 2023, with travel agencies responsible for two-thirds of all bookings. By 2027, agencies are projected to represent one-quarter of all U.S. travel sales.

The advisor landscape is shifting, with new entrants replacing retirees and an increasing number returning to office/storefront settings. Home-based independent contractors continue to dominate, yet traditional agency offices are regaining share. Travel advisors cater to an affluent and engaged clientele – 73% of clients are over 40, and 58% have incomes exceeding $100K. Personal relationships and expertise remain key selling points, while price is a lesser factor in why travelers book with advisors.

Marketing strategies continue to favor digital engagement, with email, Facebook, and Instagram leading promotional efforts. TikTok’s adoption is growing, though it remains secondary. Meanwhile, generative AI awareness is high (86%), but adoption among advisors remains limited.

Looking ahead, the segment remains optimistic. Despite concerns over rising travel costs and airfares, 72% of advisors have a positive outlook on the future. With a growing market share, a resurgence in corporate travel, and a strong foothold in high-value segments, the U.S. travel agency market is well-positioned for sustained success.